Australia and New Zealand Banking Group Ltd. — Interim / Quarterly Report 2014

Aug 14, 2014

==> picture [113 x 36] intentionally omitted <==

Media Release

For Release: 15 August 2014

ANZ New Zealand Disclosure Statement nine months to June 2014

- Strategy driving growth, productivity benefits and improved customer coverage -

Australia and New Zealand Banking Group Limited (ANZ) NZ Branch Disclosure Statement for the nine months ended 30 June 2014 was released today, showing a strong performance for ANZ New Zealand[1] with unaudited cash profit[2] of NZ$1.27 billion, up from $1.06 billion in the corresponding period in FY13 (PCP).

Unaudited statutory profit was NZ$1.24 billion, up from $1.03 billion, reflecting improvement in the economy, with increased credit quality, a lift in lending and deposits, and cost reductions and productivity gains from simplifying the business.

Key points – all financial comparisons are PCP unless noted[2]

• Unaudited cash profit of $1.27 billion, up 19%.

• Unaudited statutory profit of $1.24 billion, up 21%.

• Growth of $3.68 billion in gross lending since 30 September 2013, driven by market share growth in home loans, credit cards and commercial lending. ANZ is now market leader for new home lending in all major New Zealand cities including Auckland and Christchurch.

• Growth of 6% in customer deposits over the nine months.

• ANZ is continuing to deliver productivity benefits from the merger of its brands and technology platforms with branch coverage of the New Zealand market improving.

• Improved credit impairment result and further decrease in impaired assets, reflecting the improving economy and strong management of bad debts.

A table of key financial information follows

For media enquiries contact: Pete Barnao Communications Manager, Media Tel: +64-9-252 6623 or +64-27-277 3139 Email: Pete.Barnao@anz.com

1 ANZ New Zealand represents all of ANZ’s operations in New Zealand, including ANZ Bank New Zealand Limited, its parent company ANZ Holdings (New Zealand) Limited and the New Zealand branch of ANZ. 2 Statutory profit has been adjusted to exclude non-core items to arrive at cash profit, the result for the ongoing business activities of ANZ New Zealand. All comparisons in Key Points are on a cash profit basis and relate to the prior comparative period unless otherwise stated. Refer to Summary of Key Financial Information for details of reconciling items between cash profit and statutory profit.

Summary of Key Financial Information - ANZ New Zealand

Profit (unaudited)	9 Months30 June20149 Months30 June2013MovementJune 14 vJune 13MovementJune 14 vJune 13YearSeptember2013$m$m$m%$m
Net interest incomeOther external operating incomeOperating incomeOperating expensesProfit before credit impairment andincome taxProvision for credit impairmentProfit before income taxIncome tax expense	2,0561,958985%2,6417616897210%868
	2,8172,6471706%3,5091,0961,155(59)-5%1,498
	1,7211,49222915%2,011(20)50(70)large65
	1,7411,44229921%1,9464763829425%513
Cashprofit	1,2651,06020519%1,433
Reconciliation of cash profit to statutory profitCash profit1,2651,06020519%1,433Reconciling items (net of tax):Economic hedging volatility1(29)(14)(15)large(39)Insurancepolicyasset valuations27(17)24large(25)
Statutory profit	1,2431,02921421%1,369
Consisting of:RetailCommercialOperations & SupportNew Zealand BusinessesWealthInstitutionalOther	3272685922%380549525245%699(1)(18)17-94%(11)
	87577510013%1,0681485593large7923723521%2815(5)10large5
Cashprofit	1,2651,06020519%1,433
Reconcilingitems	(22)(31)9-29%(64)
Statutory profit	1,2431,02921421%1,369
1. Economic hedging - fair value gains/(losses)2. Insurance policy assetsANZ New Zealand enters into economic hedges to manage its interest rate and foreign exchange risk.Statutory profit includes volatility from fair value gains or losses on economic hedges that are notdesignated in accounting hedge relationships under IFRS, as well as ineffectiveness from designatedaccounting cash flow and fair value hedges. Fair value gains/(losses) on all of these economic hedges areexcluded from cash profit, as the profit or loss resulting from these transactions will reverse over time tomatch the profit or loss from the economically hedged item.Profit and loss volatility is created by the remeasurement of policyholder assets for changes in marketdiscount rates, which over time reverses to zero.